# ADRs vs. Ordinary Shares: Market Cap Explained > Learn what ADRs and ordinary shares represent, how depositary ratios work, and how to match prices and share counts when calculating market cap. Source: MarketCapLens — https://www.marketcaplens.com/learn/adrs-vs-ordinary-shares Published: 2026-11-12 Updated: 2026-11-12 An **American depositary receipt (ADR)** is a U.S.-traded security representing shares in a non-U.S. company. The **ordinary shares** are the underlying common ownership shares. One ADR can represent one ordinary share, several shares, or a fraction of a share, so the two counts are not always interchangeable. **Key takeaways** - Ordinary shares are ownership shares issued by the company; an ADR represents underlying shares through a depositary bank. - The ADR ratio tells you how many ordinary shares one receipt represents. - A market-cap calculation needs a price and share count expressed in the same unit and currency. - ADRs and the ordinary shares backing them represent the same equity. Adding both counts would count that equity twice. ## What do ADR, ADS, and ordinary shares mean? **Ordinary shares**, often called common shares, represent ownership in a company. Their voting and dividend rights depend on the share class and the company's terms. An **ADR** is a receipt issued by a U.S. depositary bank representing shares of a non-U.S. company. It trades in U.S. dollars. An **American depositary share (ADS)** is the share unit represented by the receipt; market participants often use ADR and ADS interchangeably. These definitions follow the [SEC's introduction to ADRs](https://www.sec.gov/files/adr-bulletin.pdf). A **second share class** is a separate category of a company's shares, such as Class A and Class B. The classes may have different rights and prices. That is a different issue from an ADR representing an existing class. See [dual-class shares and market cap](https://www.marketcaplens.com/learn/dual-class-shares-and-market-cap) for examples of adding distinct classes. ## How the ADR ratio works In this guide, the ratio always means **ordinary shares per ADR**: > **Ordinary shares represented = ADR count × ordinary shares per ADR** For a hypothetical program where one ADR represents two ordinary shares: - 10 ADRs × 2 ordinary shares per ADR = **20 ordinary shares represented**. - 1 billion ordinary shares ÷ 2 ordinary shares per ADR = **500 million ADR-equivalent units**. The second number expresses the full ordinary-share count in ADR units. It does not mean that 500 million receipts have actually been issued or are trading in the U.S. A ratio can also be fractional. If one ADR represents half an ordinary share, 10 ADRs represent **5 ordinary shares**. Check the company's investor-relations page or the depositary bank's program documents for the ratio and which way it is written. ## A market-cap example with matching units Suppose a hypothetical company has **1 billion ordinary shares outstanding**, one class, and an ADR representing **2 ordinary shares**. Assume an ADR price of **$100** and a matching ordinary-share value of **$50 in USD** at the same time. Both calculations describe the same **$50 billion** equity value: > **Ordinary-share basis: $50 × 1 billion shares = $50 billion** > **ADR-equivalent basis: $100 × 500 million units = $50 billion** Multiplying the $100 ADR price by 1 billion ordinary shares instead gives $100 billion: twice the value because the units do not match. This is a unit-conversion example, not a claim that two market quotes always line up exactly. If the ordinary-share quote is in another currency, convert it to USD for the USD calculator. Exchange rates and trading times can affect quoted prices. ## Using the market cap calculator Open **Optional: another class or an ADR** in the [market cap calculator](https://www.marketcaplens.com/tools/market-cap-calculator) when you need the extra inputs. The ADR converter changes a receipt count into ordinary shares. It **does not change the share-price field**. After using the converted count, enter the matching **ordinary-share price in USD**. Use the company's total [shares outstanding](https://www.marketcaplens.com/learn/shares-outstanding-vs-float) for company market cap. Converting your own 10 ADRs into 20 ordinary shares describes your holding, not the size of the whole company. Likewise, the number of receipts issued in a U.S. program may cover only part of the company's shares. For a genuinely separate share class, enter that class's own price and count. Do not enter ADRs as another class alongside the ordinary shares that back them. ## What the ratio does not tell you The ratio is a conversion factor, not an investment return or a sign that one security is cheaper. It does not measure company quality. ADR programs can also involve depositary fees; the [SEC bulletin](https://www.sec.gov/files/adr-bulletin.pdf) explains where those terms are disclosed. For the basic company-size formula, start with [what market capitalization means](https://www.marketcaplens.com/learn/what-is-market-capitalization). --- *For general education only. Nothing here is investment advice.* ## Frequently asked questions ### What is the difference between an ADR and an ordinary share? An ordinary share is a company's common ownership share. An American depositary receipt, or ADR, is a U.S.-traded security representing shares in a non-U.S. company through a depositary bank. One ADR can represent one, several, or a fraction of an ordinary share. ### How do I convert an ADR count to ordinary shares? Multiply the ADR count by the number of ordinary shares each ADR represents. If one ADR represents two ordinary shares, 10 ADRs represent 20 ordinary shares. Check the program documents for the ratio and its direction. ### Can I multiply an ADR price by ordinary shares outstanding? Only when one ADR represents exactly one ordinary share and the counts cover the same equity. Otherwise, convert the count into matching ADR-equivalent units, or use the matching ordinary-share price in the same currency. Do not add receipts and the underlying shares together. ## Sources - [Investor.gov: ADRs and their underlying-share ratios](https://www.investor.gov/introduction-investing/investing-basics/glossary/american-depositary-receipts-adrs) - [SEC: ADRs, ADSs, program terms, and depositary fees](https://www.sec.gov/files/adr-bulletin.pdf) - [Investor.gov: common ownership shares and stock types](https://www.investor.gov/introduction-investing/investing-basics/investment-products/stocks) References explain the concepts; MarketCapLens supplies the examples and calculator assumptions. See https://www.marketcaplens.com/about for who checks the numbers. ## Related guides - [What is market cap?](https://www.marketcaplens.com/learn/what-is-market-capitalization) - [Dual-class shares & market cap](https://www.marketcaplens.com/learn/dual-class-shares-and-market-cap) - [Shares outstanding vs. float](https://www.marketcaplens.com/learn/shares-outstanding-vs-float)